European Stocks Soar on Earnings Numbers and Manufacturing Data
European stocks futures are in positive territory in Tuesday trading after closing higher on Monday as better than expected manufacturing data has helped in enhancing investor’s sentiments.
European stocks have reported a monthly loss in July for the first time since March amid trader’s concerns over economic contraction during the June quarter and slowing economic growth prospects for the rest of the year. The sharp growth in coronavirus infections added to the negative price movement last month.
The pan-European Stoxx 600 index futures are in green on Tuesday. The index jumped close to 2.2% in yesterday’s trading, driven by robust price appreciation of autos stocks.
July’s final IHS Markit manufacturing PMI reading showed manufacturing activity across the eurozone expanded for the first time since early 2019.
The July’s final IHS Markit manufacturing PMI data jumped to 55.3 compared to 48.9 in the previous month. The manufacturing data from China also highlighted sharp growth.
The German Dax index surged 2.7% on Monday as German exporters applauded positive Chinese manufacturing numbers. The Caixin China manufacturing purchasing index rose to 52.8 last month as output and new orders reached a record level since January 2011.
Although auto and manufacturing stocks recovered, earnings data continues hindering sentiments. Societe Generale reported a surprise loss for the second quarter and missed consensus estimates by a wide margin. The larger than expected loan provisions plunged its profits.
The pre-tax profit of HSBC also plunged by 65% year-over-year for the first six months of this year. The shares of the largest European bank dropped close to 3% after the earnings announcement. Heineken slashed its dividend as the company reported a loss for the first half of the year.